Private enterprise confidence still high, but dipping in a testing environment

What this tells us is that the market businesses are operating in is highly nuanced. Much depends on your size, your level of reserves and your ownership/funding structure – all of which can act as safety nets. Family businesses clearly continue to have concerns about wealth preservation, succession and IHT. The sector you operate in naturally matters too: technology firms, for example, are significantly more confident than those in retail or hospitality.

For most, the operating environment is tough with multiple headwinds. Costs have increased, inflation has risen, there is a general sense of unpredictability in the market, and consumer spending continues to be reined in by the cost of living.

Against these pressures we must place the almost inherent positivity of the UK’s private enterprises leaders who are naturally entrepreneurial, can-do and ambitious. The result is what we see in our pulse survey: continuing confidence, but with hairline cracks showing through.

I for one am actually encouraged by this. It shows that private enterprise leaders are not blind optimists with their heads in the sand: they are realists who see and understand the market they are faced with, and are rolling up their sleeves to deal with it.

This feeds through into investment plans. As in our previous wave of research, technology including AI is the dominant investment area (cited by 66%), far ahead of workforce & skills in second place (37%). It has been another aspect of encouragement to me that businesses are taking a much more evolved approach to AI now. After the initial hype wave of excitement, work has settled into a more deliberate and focused mindset – identifying use cases and specific processes that can be re-engineered through AI or automation. To do this, it’s essential that there is a mature data layer to feed into AI solutions. Reaching this data maturity is now the focus for many – having perhaps been under-invested in historically. Getting from value-adding use cases to enterprise scale change will be the next stage in the evolution.

While workforce & skills rank some way behind technology for investment, nevertheless the percentage citing this as a priority has jumped by 12%. This perhaps indicates the realisation that to get the best out of AI, investment in upskilling is essential. But it also perhaps shows that leaders are cognisant of the strains of today’s fast-paced and uncertain environment on their people. Investing in and supporting staff remains a critical priority.